Contract for rights on Property
Priya
(Querist) 20 March 2008
This query is : Resolved
Property was purchased in my name by my father [from his earnings]. There is no gift deed. To avoid legal complications instead of transfering the property to three persons [married & separated daughter, mother & myself, a major unmarried daughter] can i have an agreement giving both of them rights on the property? I also have a married brother with 2 minor sons. Who are the people who should be part of this agreement? Who have legal rights to question this agreement? Am I saving the three of us from legal complications with regard to transfer or sale of this property in future. What are the rights each of us get if the agreement is only in writing on a stamp paper? How important is registration for each of us to have rights?
Rajesh Kumar
(Expert) 20 March 2008
The property was received by you as gift from father, and as such you the exclusive owner of the property. You dont require consent of any person and share the property with whosoever you like.
You are saying that the property was received by you as gift- i suppose that the gift was validly made and the gift deed was properly registered.
Priya
(Querist) 20 March 2008
The gift is by implication and words. There is no gift deed. Will agreement give us rights? How should it be executed / registered?
VIKAS GARG
(Expert) 24 March 2008
Hello Priya
First of all I am presuming property here means is immovable property and you are above 18 year of age. According to your statement one thing is clear that you are the sole owner of the property, which your father purchased in your name. As Benami Transaction Act, 1988 says that the person in whose name property is purchased is owner of the property. It doesn't matter property is purchased by your father from his personal earnings.
From reading of section 4 of Benami Transcation Act, 1988 it can be clearly stated you are the sole owner of the property.
The other relevant section is section 3 of Benami Transcation Act, 1988 says if any body purchased property in his daughter of wife's then it will be considered that property is purchased in her benefit. As in your case also it will be presumed that property is purchased for your benefit.
When you are sole owner of the property, now you are free to give it any body. From you statement it appears that you want to give share of property to your family members without any consideration. It is better to gift them through registered gift deed. Now it depends where you live, then only it can be told what stamp duty that you have to pay.
Immovable property cannot be transferred without registration. If you want to give property without consideration (cost) then it is Gift. If you want to take consideration for transfer of property then it is sale. If you want to gift immovable property then you are required to give it through registered gift deed. Here agreement, when you want to give it in affection without any consideration, is of no use. Section 25 of Indian Contract Act, 1872 also says agreement without consideration is void but registered agreement even without consideration is valid. Section 54 of Transfer of Property Act, 1882 also says immovable property cannot be transferred without registration.
So it is advised to transfer immovable property through registered gift deed.
Section 4 of Benami Transaction Act:
"Section 4 - Prohibition of the right to recover property held benami
(1) No suit, claim or action to enforce any right in respect of any property held benami against the person in whose name the property is held or against any other person shall lie by or on behalf of a person claiming to be the real owner of such property.
(2) No defence based on any right in respect of any property held benami, whether against the person in whose name the property is held or against any other person, shall be allowed in any suit, claim or action by or on behalf of a person claiming to be the real owner of such property.
(3) Nothing in this section shall apply,--
(a) where the person in whose name the property is held is a coparcener in a Hindu undivided family and the property is held for the benefit of the coparceners in the family; or
(b) where the person in whose name the property is held is a trustee or other person standing in a fiduciary capacity, and the
property is held for the benefit of another person for whom he is a trustee or towards whom he stands in such capacity."
Section 3 of Benami Transaction Act, 1988
"Section 3 - Prohibition of benami transactions
(1) No person shall enter into any benami transaction.
[(2) Nothing in sub-section (1) shall apply to --
(a) the purchase of property by any person in the name of his wife or unmarried daughter and it shall be presumed, unless
the contrary is proved, that the said property had been purchased for the benefit of the wife or the unmarried daughter;
(b) the securities held by a--
(i) depository as a registered owner under sub-section (1) of section 10 of the Depositories Act, 1996;
(ii) participant as an agent of a depository.
Explanation.--The expressions "depository" and "Participants" shall have the meanings respectively assigned to them in clauses (e) and (g) of sub-section (1) of section 2 of the Depositories Act, 1996.]
(3) Whoever ente
